How did the TCJA change the standard deduction and itemized deductions? Q.How did the TCJA change the standard deduction and itemized deductions? A.The Tax Cuts and Jobs Act nearly doubled the standard deduction and eliminated or restricted many itemized deductions in 2018 through 2025. It also eliminated the “Pease” limitation on itemized deductions for those years. Read more about How did the TCJA change the standard deduction and itemized deductions?
What is the Flat Tax? Q.What is the Flat Tax? A.While any tax system with flat rates could be called a flat tax, the name is usually reserved for a system developed by Robert Hall and Alvin Rabushka in 1985. Their flat tax is really a two-part VAT: All value added except wages is taxed at the business level and wages are taxed at the individual level at the same flat rate but with an exemption related to family size. Read more about What is the Flat Tax?
What are tax credits and how do they differ from tax deductions? Q.What are tax credits and how do they differ from tax deductions? A.Credits reduce taxes directly and do not depend on tax rates. Deductions reduce taxable income; their value thus depends on the taxpayer’s marginal tax rate, which rises with income. Read more about What are tax credits and how do they differ from tax deductions?